Standard Chartered (LON:STAB) reported what it described as a record third-quarter performance, with operating income rising 14% year over year at constant currency to $5.8 billion and profit before tax increasing 29%.
The bank said growth was broad-based across wealth solutions, global markets, global banking and transaction services. Year-to-date earnings per share rose 27%, supported by income growth, operating leverage and capital returns.
Management upgraded its full-year outlook, saying it now expects total income growth above its prior 5% to 7% range, excluding notable items, and return on tangible equity of around 14%, compared with previous guidance of more than 12%.
Income growth and operating leverage
Net interest income increased 9% year over year and 3% sequentially to just under $3 billion. The bank said quarterly growth was driven by lending volumes, while the combined effects of rates and margins were broadly neutral as benefits from higher rates were offset by term-deposit margin pressure.
Non-interest income climbed 19% to $2.8 billion and accounted for roughly half of group income. Expenses rose 9% to about $3.4 billion, against what management described as a low comparator in the prior-year quarter. Pre-provision operating profit increased 22% to $2.4 billion.
The bank raised its full-year net interest income growth expectation to around 4%. It said future rate benefits are expected to be offset by business mix changes, further compression in term-deposit margins and headwinds from Wealth and Retail Banking portfolio exits. Lending-volume growth is also expected to moderate from the third-quarter pace.
Standard Chartered said it is shifting its cost guidance toward a cost-income ratio framework. For the full year, it expects a cost-income ratio of around 60%, excluding notable items, representing a 300-basis-point improvement from 2025. It reiterated its target of around 57% by 2028.
Chief Executive Officer Bill Winters said the bank’s investment programs in wealth, financial markets, transaction services and global banking were now producing results. “The investments that we made across wealth, both technology and RMs, breadth of product and quality of advice… it is paying off,” Winters said.
Credit quality and capital
Credit impairment was $90 million during the quarter, including a net $34 million charge from overlays related to the Middle East conflict. The bank introduced a $63 million overlay for broader sectors affected by the conflict and higher oil prices, partly offset by $29 million of releases, primarily in petrochemicals and sovereign exposures.
The loan-loss rate was 20 basis points year to date, below the bank’s through-the-cycle target range of 30 to 35 basis points. Management said high-risk assets declined by $1.2 billion from the prior quarter, reflecting lower early-alert and credit-grade 12 exposures.
Corporate and Investment Banking recorded a net impairment recovery of $24 million, as portfolio upgrades and repayments outweighed provisions. Wealth and Retail Banking impairment was $114 million, broadly unchanged from the previous quarter.
Customer loans and advances increased 4% during the quarter. Wealth and Retail Banking growth reflected mortgage demand, secured wealth lending and inflows tied to the FCNR scheme for non-resident Indians. Corporate and Investment Banking growth was led by global banking and trade.
The common equity tier 1 ratio stood at 13.8%. Excluding the 38-basis-point effect of the $1 billion share buyback announced in the second quarter, the ratio was broadly unchanged sequentially. The bank expects its Pillar 2A requirement to decline by another 30 basis points from Jan. 1, 2027, taking its minimum CET1 requirement to around 10%.
Management now expects Basel 3.1 implementation to lift risk-weighted assets to about $275 billion on Jan. 1, 2027, including the usual fourth-quarter operational-risk increase and management actions.
Wealth and markets lead business performance
Wealth and Retail Banking income rose 10% to $2.5 billion. Wealth solutions income increased 26% to $1.1 billion, its third consecutive quarter above $1 billion. Investment products income rose 28%, while bancassurance income increased 18%.
The division attracted record net new money of $20 billion, including about $5 billion of FCNR-related deposit inflows. Year-to-date net new money reached $52 billion. The bank added 76,000 new-to-bank affluent clients during the quarter, while assets under management were broadly stable at $472 billion due partly to client mandate changes that shifted some balances to assets under custody.
Corporate and Investment Banking income rose 16% to $3.4 billion. Transaction services income increased 9%, global banking income rose 7%, and global markets income advanced 21%. Global markets flow income also grew 21%, supported by client activity, cross-selling and investments in electronic platforms.
CIB profit before tax increased 38% to $1.6 billion, including the net credit recovery.
Winters said the bank remained alert to geopolitical risks, particularly in the Middle East, and to signs of strain in financing markets. Still, he said Standard Chartered’s diversified franchise, funding base and improving asset quality supported confidence in its medium-term goals, including high-teens earnings-per-share compound annual growth through 2028 and an 18% return-on-tangible-equity ambition by 2030.
About Standard Chartered (LON:STAB)
Standard Chartered PLC is an international banking company. The Banks’s segments include Corporate & Institutional Banking, Retail Banking, Commercial Banking and Private Banking. Its Corporate & Institutional Banking segment allows companies and financial institutions to operate and trade globally, and its Private Banking segment supports high net worth individuals with their banking needs across borders and offers access to global investment opportunities. Its Retail Banking segment offers clients, as well as small businesses a range of banking support solutions, and its Commercial Banking segment provides mid-sized companies with financial solutions and services.
